Objectives of the Review and Workshops Review of National Framework for Electricity Distribution Network Planning and Expansion ANNE PEARSON Senior Director, AEMC MELBOURNE 27 MAY 2009 AEMC PAGE 1
OVERVIEW • Objectives of the Review • Timetable for the Review • Purpose of the Workshops • Structure for Workshop 1 AEMC PAGE 2
OBJECTIVES OF THE REVIEW • Under the MCE’s ToR, the national framework for distribution network planning will include: – A requirement on DNSPs to perform an annual planning process; – A requirement for DNSPs to produce and make publicly available an annual planning report with a 5 year horizon; – A requirement for DNSPs to undertake a case by case project assessment process when considering network expansions and augmentations; and – A dispute resolution process. AEMC PAGE 3
OBJECTIVES OF THE REVIEW • MCE’s ToR specified that the national framework should achieve the following outcomes: – DNSPs have a clearly defined and efficient planning process; – DNSPs develop the network efficiently and assess non-network alternatives in a neutral manner; – Appropriate information transparency for network users, including connecting users, and non-network proponents; – A level playing field for all regions in terms of investment attraction and promoting more efficient decisions; and – A reduced compliance burden for participants operating across multiple NEM regions. AEMC PAGE 4
TIMETABLE FOR THE REVIEW Milestone Date Publication of Scoping and Issues 12 March 2009 Paper Close of submissions on Scoping and 17 April 2009 Issues Paper Workshops on Indicative Framework 27 May and 4 June 2009 Specifications Publish Draft Report and framework 9 July 2009 specifications Submissions due on Draft Report 13 August 2009 Public forum on Draft Report Early August 2009 Final Report and draft Rules submitted By 30 September 2009 to the MCE AEMC PAGE 5
PURPOSE OF THE WORKSHOPS • For interested parties: – Opportunity to comment on the AEMC’s proposed “high level” design for the national framework – Opportunity to discuss the proposed design for the national framework with industry members from other jurisdictions • For the AEMC: – Allows AEMC to present emerging thinking on the design and scope of the national framework before Draft Report publication – Opportunity for the AEMC to seek industry views on a range of policy and technical issues • Indicative Framework Specifications do not represent the Commission’s draft recommendations for the national framework AEMC PAGE 6
STRUCTURE FOR WORKSHOP 1 Time Time Agenda item Agenda item 10:10 am - 10:30am Overview of the Indicative Framework Specification 10:30 am - 10:40 am Introduction to group breakout sessions 10:40 am - 12:40 pm Group breakout and presentations: Session 1 12:40 pm - 1:20 pm Lunch 1:20 pm - 3:20 pm Group breakout and presentations: Session 2 3:20 pm - 3:40 pm Afternoon tea 3:40 pm - 4:10 pm General questions from the floor 4:10 pm - 4:25 pm Summary of workshop outcomes and achievements 4:25 pm - 4:30 pm Concluding remarks AEMC PAGE 7
Overview of the Indicative Framework Specification Review of National Framework for Electricity Distribution Network Planning and Expansion EAMONN CORRIGAN Director, AEMC MELBOURNE 27 MAY 2009 AEMC PAGE 1
OVERVIEW • Principles and key design aspects for the National Framework • Annual planning process and reporting requirements • Non-network Engagement • Joint Planning Process
Principles and key design aspects for the National Framework AEMC PAGE 3
PRINCIPLES 1. Transparency 2. Economic Efficiency 3. Proportionate 4. Technology neutral 5. Consistency across the NEM 6. Fit for purpose reflecting local conditions 7. Builds on existing jurisdictions requirements 8. Consistency with transmission planning arrangements AEMC PAGE 4
KEY DESIGN ASPECTS • Trade off between costs (including time) and benefits – Making sure processes and information deliver positive benefits • Ensuring efficient network planning – identifying and assessing appropriate market benefits and alternatives • Interaction between transmission and distribution network planning – Clearly defined roles and responsibilities • Appropriate scope of projects under the national framework – Need to make the framework proportionate • Need to reflect local conditions and type of distribution projects • Need to get the definitions correct AEMC PAGE 5
Annual Planning Process and Reporting Requirements AEMC PAGE 6
ANNUAL PLANNING AND REPORTING • Purpose of the Annual Planning Report is to provide transparency to planning and appropriate information to stakeholders • Level of detail in the Annual Planning Report should recognise the nature and importance of the asset and the volume of projects in that asset class • Scope: any activity/asset that materially affects the performance of the shared network should fall within the remit of the national framework • Timeframe: Minimum of 5 years (forward looking) for distribution networks, need to consider sub-transmission • Need to consider publication date • Establish a distribution network advisory committee?? • Initial view that Rules should be sufficient and no need for supporting guidelines AEMC PAGE 7
ANNUAL PLANNING AND REPORTING Proposed content of the Annual Planning Report: • Network description and operating environment • Performance of the network • Asset Management strategy • Load forecasts • System limitations • Options/Preferred Options • Planning for High stress events AEMC PAGE 8
PAGE 9 Non-network Engagement AEMC
NON-NETWORK ENGAGEMENT • MCE’s ToR requested AEMC to look at “perceived failure” by DNSPs to look at non-network alternatives • Formal planning requirements alone are unlikely to lead to increased engagement with non-network proponents and investigation of non-network options. • Most DNSPs have established internal demand management programs • Propose publication of a Non-network Strategy to ensure alternatives to network expansions are considered fairly and adequately . • Indicative Framework Specification seeks to encourage proactive engagement with non-network proponents and consideration of non-network alternatives through all components of the national framework AEMC PAGE 10
NON-NETWORK ENGAGEMENT Non-network Strategy Annual RIT-D Planning Report AEMC PAGE 11
NON-NETWORK STRATEGY • Proposed Non-network Strategy would require DNSPs to use reasonable endeavours to engage with non-network proponents • The Strategy would be published and clarify each DNSPs’ processes for: – assessing non-network proposals – maintaining a register of interested parties – maintaining a database of non-network case studies/proposals – consideration of non-network payments • Strategy would provide the basis for constructive engagement and information sharing, and would encourage greater efficiency over time • Strategy would also assist the RIT-D request for proposals process AEMC PAGE 12
PAGE 13 Joint Planning Process AEMC
JOINT PLANNING PROCESS • Current joint planning process appears to work well today, although some clarification of the provisions for joint planning may be required • Need for a single project assessment process for joint network investments • Initial view is that all joint network investments should be assessed under the Regulatory Investment Test for Transmission • Issues to be resolved: – Scope of projects subject to the joint planning process; – Responsibilities of each party. • Should one party be responsible for each joint network investment with TNSPs and DNSPs deciding upon responsibilities? AEMC PAGE 14
Group Breakout Sessions Review of National Framework for Electricity Distribution Network Planning and Expansion ANITA LAI Advisor, AEMC MELBOURNE 27 MAY 2009 AEMC PAGE 1
GROUP BREAKOUT SESSIONS • AEMC is seeking comments on six areas in regards to the annual planning process and reporting requirements • Two group breakout sessions will be held, with three areas for discussion in each session • Attendees will be broken into six colour-coded groups with each group to focus on one allocated area • Following group discussions, each group will present their response • Discussions from today will be considered by the AEMC in the development of its recommendations for the Draft Report AEMC PAGE 2
SESSION 1 Workshop 1: Annual Planning Process & Reporting AEMC PAGE 3
SESSION 1 1. Joint Planning Framework – DNSPs and TNSPs are required under the Rules to conduct joint planning – Some of the joint planning requirements may need to be clarified – For discussion and consideration (see section 3.b and section 5 of the indicative framework specification ): – DNSPs and TNSPs would agree on responsible party for a joint network investment; if cannot agree, AER to appoint – Each joint network investment would be subject to a single RIT (RIT-T?) – What should be the definition of the term “joint network investment” AEMC PAGE 4
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